Nebraska would create a state marketplace for health insurance, in accordance with federal health care reforms, if either of two bills in the Legislature are enacted.

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On Feb. 21, the Banking, Commerce and Insurance committee heard testimony on two bills that would create the Nebraska Health Benefit Exchange.

The purpose of the exchange is to help provide health insurance for individuals and small businesses. The goal is to access to affordable health care and reduce the number of uninsured people in the state.

In one version, LB 835, introduced by Sen. Jeremy Nordquist of Omaha, the exchange would be overseen by an independent 11-member governing board within the Department of Insurance.

Under LB 838, introduced by Sen. Rich Pahls of Boys Town, the Director of Insurance would oversee and regulate the exchange.

On March 23, 2010, President Barack Obama signed the Affordable Care Act, requiring states to have health insurance exchange programs by Jan. 1, 2014. If a state does not create an exchange, the federal government can create one for the state.

Implementation would be federally funded, but after that, the exchanges have to be self-sustaining. The Nebraska Department of Insurance estimates that the exchange would cost about $8-14 million every year to operate. The department estimated it would cost anywhere from about $61-87 million to establish the exchange.

Tiffany Seibert, legislative aide to Nordquist, presented LB 835 on Nordquist’s behalf because he was in a conference. Seibert said the exchange creates a competitive marketplace for insurance that would give consumers more control, and quality choices for buying health insurance.

“In a nutshell, it’s intended to make buying insurance easier for those who need it and there is a significant need in our state,” she said.

According to a 2009 study for the Department of Insurance, 11.5 percent, or 205,000 people, don’t have health insurance in Nebraska.

Bruce Ramge, director of insurance, testified against both bills.

LB 835 is a “deeply flawed” response to creating a health benefit exchange, he said.

“LB 838 is an improvement upon LB835, but developing an exchange under any circumstances is inappropriate before the United States Supreme Court issues a ruling on the pending litigation on the constitutionality of the Affordable Care Act,” Ramge said.

Nebraska’s government would still have options if it does not pass such legislation during this session, he said. The governor could issue an executive order to go forward with the exchange or ask for a special legislative session, Ramge said.

But Bruce Rieker, vice president of advocacy for the Nebraska Hospitals Association, testified in support of LB 835.

“The simple truth is Nebraska doesn’t have time to wait,” he said, referring to the next federal grant deadline of June 29, 2012. The grant application requires a structure for the exchange and a budget through 2014.

A total of 16 people testified in support of one or both bills; eight people testified against one or both bills and four people testified in a neutral capacity.